You are considering two insurance settlement offers. The first offer includes annual payments of $45,000 a year for 12 years with the first payment made at the beginning of the year. The other offer is the payment of one lump sum amount at the beginning of the year. You are trying to decide which offer to accept given the fact that your discount rate is 7%. What is the mininum amount that you will accept if you are to select the lump sum offer? • A. $540,000.00 • в. $357,420.88 • C. $412,738.96 • D. $382,440.35 • E. $437,358.40
You are considering two insurance settlement offers. The first offer includes annual payments of $45,000 a year for 12 years with the first payment made at the beginning of the year. The other offer is the payment of one lump sum amount at the beginning of the year. You are trying to decide which offer to accept given the fact that your discount rate is 7%. What is the mininum amount that you will accept if you are to select the lump sum offer? • A. $540,000.00 • в. $357,420.88 • C. $412,738.96 • D. $382,440.35 • E. $437,358.40
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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You are considering two insurance settlement offers. The first offer includes annual payments of $45,000 a year for 12 years with the first payment made at the beginning of the year. The other offer is the payment of one lump sum amount at the beginning of the year. You are trying to decide which offer to accept given the fact that your discount rate is 7%. What is the mininum amount that you will accept if you are to select the lump sum offer? • A. $540,000.00 • в. $357,420.88 • C. $412,738.96 • D. $382,440.35 • E. $437,358.40
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